Op-Eds

Changes to Housing Law to spur market

Released at: 13:46, 04/07/2015

Mr. Phan Thanh Huy, Deputy CEO of property developer Novaland, discusses what he sees ahead for the market and his company's plans.

■ The amendments to the Law on Housing have now taken effect. How do you think the changes allowing foreigners and overseas Vietnamese to buy houses and invest in the property market will affect the real estate market?

During the first six months of this year the real estate market has been in a recovery phase and is making significant strides forward. This is clear to see through the increasing number of real estate transactions, especially in Ho Chi Minh City. In the first half there were 7,000 successful transaction in the city, a year-on-year increase of 2.8-fold.

After July 1 the new regulation that property projects must be guaranteed by banks will create many changes in the market. Other related regulations on housing ownership for foreigners and overseas Vietnamese will also bring changes to the market, ushering in a new trend in the industry.

This is a legislative breakthrough and is totally consistent with Vietnam’s international integration. This new policy will have a positive impact on the market because many overseas Vietnamese and foreign experts and businesspeople wish to buy house in Vietnam.

■ As a property developer, what suggestions would you make to foreigners and Vietnamese planning to invest in the real estate market or buy houses and apartments in the country?

We think that there are five important factors for them to note when buying a home.

The first is location. This is an immutable factor when buying a home. A good location should be conveniently connected to facilities like markets, schools, hospitals, and the workplace.

The second is the selling price and payment terms. It should be a reasonable price and close to the real value of apartment. The price depends on the location and the market segment. The segmentation of the apartment depends on its design.

The third is planning and design. The project location, planning and design, and materials used indicate the project segment.

Fourth is the quality of the project and the reputation of the investor. The investor has to demonstrate professionalism, financial capacity, and a commitment to customers during the construction process.

Fifth is liquidity, meaning it is easy to buy, sell or rent out. This is one of the most important elements for a buyer to know if they have made the correct decision. Whether buying to invest or to live in, the apartment should be easy to rent out profitably.

■ How does your company plan to take advantage of the benefits these changes may bring to the market?

Compared with other countries in the region, Vietnam still has a very low proportion of housing ownership. In Singapore the rate is more than 85 per cent. With a population of more than 90 million people, Vietnam has high demand for housing.

Moreover, this demand is not just among local people but also overseas Vietnamese and foreigners who want to invest in Vietnam. Understanding the needs and concerns about legal provisions and housing ownership rights, our company has designed many marketing programs in which we promise to support customers with legal issues, investment, and management.

The company will refund the full amount plus interest if a customer does not obtain ownership of a home in accordance with the laws of Vietnam.

The cooperation guarantees we signed with VPBank and SeaBank in May helps create confidence and ensure maximum benefits for customers.

We hope our programs, with attractive incentives, will help customers and contribute to the revival of the real estate market.

■ The housing market seems to be recovering. How is your company capitalizing on this?

Building a stable trademark is our long term strategy. All our activities are based on this. This year has marked the recovery of the property market but the competition has become more aggressive. Products must be diverse and cost-effective and quality must be guaranteed.

The market will move following the general trend around the world. People will gradually shift to mixed developments that include residential apartments, offices, and places of business.

Accordingly, we always choose new products to meet the diverse needs of customers for housing or business or both.

This year we will continue to develop projects in strategic locations with new products like villas, townhouses, and detached houses. In particular, we focus on developing management services to offer civilized living and security for homebuyers, particular foreigners and overseas Vietnamese.